The Lemon Fool

scrumpyjack wrote:Sadly I think it will turn out to be a lot easier for the EU countries to build up viable financial services than it will be for the UK to build up the sort of successful manufacturing business that Germany has. The City has a very inflated view of its own brilliance.

I am not so sure that it will be all that easy for say even Frankfurt to become a serious threat to London at least for the next few years. The continentals are pretty bound by rule books all the time but London is much more pragmatic in my (limited) experience. Certainly that is very evident in insurance which is a very large invisible export not just to the EU of course, but around the world. They are very used to the need for licences and so on. Would you believe that Lloyds insurance market has to be licensed individually in every US State so they are well used to that sort of thing. I imagine the big international financial service firms are as well.

Maybe one of the advantages of fairly incompetent regulators!

Dod

That Lloyds of London comment is interesting. Must be a massive task. Mind you, all the US states seem to require even natives to register state-by-state for, e.g. real estate agents, accountants, etc.

Dod101 wrote:

scrumpyjack wrote:Sadly I think it will turn out to be a lot easier for the EU countries to build up viable financial services than it will be for the UK to build up the sort of successful manufacturing business that Germany has. The City has a very inflated view of its own brilliance.

I am not so sure that it will be all that easy for say even Frankfurt to become a serious threat to London at least for the next few years. The continentals are pretty bound by rule books all the time but London is much more pragmatic in my (limited) experience. Certainly that is very evident in insurance which is a very large invisible export not just to the EU of course, but around the world. They are very used to the need for licences and so on. Would you believe that Lloyds insurance market has to be licensed individually in every US State so they are well used to that sort of thing. I imagine the big international financial service firms are as well.

Maybe one of the advantages of fairly incompetent regulators!

Dod

Yes I am very well aware of that! I was deeply involved with the Lloyd's market reporting for many many years from 1994 when the US Regulator started insisting that the two Lloyd's Trust Funds (Surplus Lines & Reinsurance) meet the full US insurance quarterly and annual reporting requirements ('Yellow Book'), following the near collapse of Lloyd's. You would not believe the volume of paperwork. Each quarterly return for about 360 Syndicate/Trust funds was over 1,000 pages. These were then bound with silk ribbon, notarised and flown to New York.

Interesting times those were!

It can take just a small amount of regulatory grit in the wheels of the financial machine to cause profound change. Dodd-Frank for example made it impractical to trade many financial derivatives with US Corpoations from outside the US. The same sort of thing will happen with the EU, but it will take time.